EuropeanDec 23 2015

Fund review: Henderson Horizon Pan European Dividend Income fund

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Fund review: Henderson Horizon Pan European Dividend Income fund

Henderson has unveiled a new fund to add to its fast expanding equity dividend portfolio.

To be managed by Nick Sheridan, the Henderson Horizon Pan European Dividend Income fund will be denominated in euros, Luxembourg-domiciled and benchmarked against the MSCI Europe net return index. The manager also runs the Henderson Horizon Euroland fund.

The objective of the fund is to deliver income above the market average from pan-European stocks. The group says it will be managed using a “tried and tested” methodology designed to eliminate market noise and to help identify stocks which offer the biggest discount to fair value, which it hopes will create the potential for an above-average total return.

The fund will be managed using bottom-up analysis and will focus on stocks that typically have a higher dividend yield, lower valuation and a high return

on capital relative to their market peers. Mr Sheridan will work alongside five equity analysts in the European equities team and work closely with other European equity fund managers at Henderson.

The A-class fund carries a 5 per cent entry charge, with ongoing charges of 1.95 per cent. The minimum investment when buying in sterling is £1,500.

MM comment:

Markets have been up and down and Europe has been a difficult place to invest.

Despite this, European equity funds have been selling like hot cakes, according to the Investment Association. Its recent data shows the Europe region (which includes funds in the Europe ex UK, Europe including UK and European Smaller Companies sectors) was the best-selling sector in October, with net retail sales of £532m, against an outflow of £347m in October 2014. Demand is clearly strong in the space, so Henderson launching this fund now is timely.

The fund manager, Mr Sheridan, also manages the Euroland fund which has seen strong returns over the past five years.

European equities are still offering competitive valuations. Regardless of the economic issues over the past few years, the space is still providing attractive returns.